RDEC (Research & Development Expenditure Credit)
A UK R&D tax incentive aimed primarily at larger companies, given as a taxable above-the-line credit rather than an enhanced deduction.
The Research & Development Expenditure Credit (RDEC) is the R&D tax relief route used mainly by large companies and by SMEs that have been subsidised or subcontracted to do R&D. Unlike the older SME scheme, RDEC is paid as a taxable credit calculated as a percentage of qualifying R&D spend, shown above the line in the accounts so it visibly affects reported profit. UK R&D relief has been merging the SME and RDEC schemes, so founders should check current HMRC rules for their accounting period.
Examples
A scaled-up software company claims RDEC on its qualifying engineering costs. — An SME doing grant-funded R&D claims under RDEC rather than the SME scheme for the subsidised portion.
How it relates to The Startup Foundry
Understanding which R&D relief route applies improves the financial picture investors scrutinise. The Foundry's Investability Report and Learn/Improve modules help founders present a credible, well-structured financial model before the Funding Sprint.